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8-K - 2010 4TH QUARTER EARNINGS RELEASE - C. H. ROBINSON WORLDWIDE, INC.rrd299252.htm

 

 

C.H. Robinson Worldwide, Inc.

14701 Charlson Road

Eden Prairie, Minnesota 55347

Chad Lindbloom, senior vice president and chief financial officer (952) 937-7779

Angie Freeman, vice president, investor relations and public affairs (952) 937-7847

FOR IMMEDIATE RELEASE

C.H. ROBINSON REPORTS FOURTH QUARTER RESULTS

MINNEAPOLIS, February 1, 2011 - C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRW), today reported financial results for the quarter ended December 31, 2010.

Summarized financial results for the quarter ended December 31 are as follows (dollars in thousands, except per share data):

Three months ended

December 31,

Twelve months ended

December 31,

2010

2009

%

change

2010

2009

% change

Total revenues

$ 2,325,349

$2,008,366

15.8%

$9,274,305

$7,577,189

22.4%

Net revenues:

Transportation

Truck

$ 290,465

$ 250,063

16.2%

$ 1,076,247

$ 1,040,703

3.4%

Intermodal

9,441

8,637

9.3%

36,550

35,245

3.7%

Ocean

16,714

13,610

22.8%

60,763

54,188

12.1%

Air

10,756

9,268

16.1%

42,315

32,662

29.6%

Other logistics services

14,397

12,255

17.5%

57,254

44,784

27.8%

Total transportation

341,773

293,833

16.3%

1,273,129

1,207,582

5.4%

Sourcing

31,704

33,105

-4.2%

139,377

128,582

8.4%

Information services

14,687

12,148

20.9%

55,472

45,795

21.1%

Total net revenues

388,164

339,086

14.5%

1,467,978

1,381,959

6.2%

Operating expenses

224,099

196,328

14.1%

845,118

797,148

6.0%

Operating income

164,065

142,758

14.9%

622,860

584,811

6.5%

Net income

$ 103,161

$ 87,734

17.6%

$ 387,026

$ 360,830

7.3%

Diluted EPS

$ 0.62

$ 0.52

19.2%

$ 2.33

$ 2.13

9.4%

 

"We're very pleased with our performance in 2010, and we are especially proud that we were able to continue our long track record of annual earnings increases. The last few years have been challenging for many companies, and we think our results show the strength of our business model, the dedication and talent of our people, and our execution discipline," said John P. Wiehoff, chairman and chief executive officer of C.H. Robinson.

Wiehoff continued, "There is still a lot of uncertainty in the marketplace. While supply and demand variables continue to be volatile in most of our services, we have much better net revenue growth momentum going into 2011 than we had the last few years. In January 2011, compared to January 2010, we have achieved consolidated net revenue growth, per business day, in the mid-teens. Our North American truckload volumes increased approximately seven percent in January. A lot could change in marketplace demand and capacity availability as the year progresses, but we are pleased with our early results so far this year."

Our truck net revenues, which consist of truckload and less-than-truckload ("LTL") services, increased 16.2 percent in the fourth quarter of 2010. Our truckload volumes increased approximately nine percent in the fourth quarter of 2010 compared to the fourth quarter of 2009. Our truckload net revenue margins decreased primarily due to higher fuel prices. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately eight percent in the fourth quarter of 2010 compared to the fourth quarter of 2009. Our truckload transportation costs increased approximately eight percent, excluding the estimated impacts of fuel. Our LTL net revenues increased approximately 17 percent. The increase was driven by an increase in total shipments of approximately 11 percent and increased pricing.

Our intermodal net revenue increased 9.3 percent due to increased prices, partially offset by slightly lower net revenue margins. Prices increased due to higher fuel costs, longer average length of haul, and price increases driven by a shortage of container capacity in many markets.

Our ocean transportation net revenues increased 22.8 percent in the fourth quarter of 2010, driven by large volume increases. We experienced a net revenue margin decline due to increased cost of capacity, which was partially offset by increased pricing to our customers.

Our air transportation net revenue increased 16.1 percent in the fourth quarter of 2010 due to higher volumes.

Other logistics services net revenues consist primarily of transportation management fees and customs brokerage fees. The increase of 17.5 percent was driven primarily by an increase in management fees.

For the fourth quarter, our Sourcing revenues decreased 6.5 percent. Sourcing net revenues decreased 4.2 percent to $31.7 million in 2010 from $33.1 million in 2009, primarily due to decreased volumes with a large customer.

Our Information Services revenues increased 20.9 percent in the fourth quarter of 2010 due to an increase in transactions and increases in some fees that are impacted by fuel prices.

For the fourth quarter, operating expenses increased 14.1 percent to $224.1 million in 2010 from $196.3 million in 2009. This was due to an increase of 17.7 percent in personnel expense and an increase of 4.5 percent in other selling, general, and administrative expenses. Personnel expenses related to our restricted stock program and various other incentive plans increased compared to last year. Many of these plans are variable based on growth in our earnings, and the expense increased as our year-over-year earnings growth rate accelerated through 2010. We also increased average headcount by 3.4 percent from the fourth quarter of 2009. As a percentage of net revenues, total operating expenses decreased slightly to 57.7 percent in the fourth quarter of 2010 from 57.9 percent in the fourth quarter of 2009.

Founded in 1905, C.H. Robinson Worldwide, Inc., is one of the largest non-asset based third party logistics companies in the world. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving over 36,000 customers through a network of 231 offices in North America, South America, Europe, Asia, Australia, and the Middle East. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with over 49,000 transportation providers worldwide.

Except for the historical information contained herein, the matters set forth in this release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to such factors as changes in economic conditions such as the strength of the current recovery and uncertain consumer demand; changes in market demand and pressures on the pricing for our services; competition and growth rates within the third party logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight, and changes in relationships with existing truck, rail, ocean and air carriers; changes in our customer base due to possible consolidation among our customers; our ability to integrate the operations of acquired companies with our historic operations successfully; risks associated with litigation and insurance coverage; risks associated with operations outside of the U.S.; risks associated with the potential impacts of changes in government regulations; risks associated with the produce industry, including food safety and contamination issues; fuel prices and availability; and the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports.

 

Conference Call Information:

C.H. Robinson Worldwide Fourth Quarter 2010 Earnings Conference Call

Tuesday, February 1, 2011 5:00 pm. Eastern Time

Live webcast available through Investor Relations link at www.chrobinson.com

Telephone access: 877-941-6011; conference ID 4399530

Webcast replay available through Investor Relations link at www.chrobinson.com

Telephone audio replay available until 12:59 a.m. Eastern Time on February 4: 800-406-7325;

passcode: 4399530#

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands, except per share data)

Three months ended

December 31,

Twelve months ended

December 31,

2010

2009

2010

2009

Revenues:

Transportation

$1,946,325

$ 1,606,664

$ 7,575,659

$ 5,976,102

Sourcing

364,337

389,554

1,643,174

1,555,292

Information Services

14,687

12,148

55,472

45,795

Total revenues

2,325,349

2,008,366

9,274,305

7,577,189

Costs and expenses:

Purchased transportation and related services

1,604,552

1,312,831

6,302,530

4,768,520

Purchased products sourced for resale

332,633

356,449

1,503,797

1,426,710

Personnel expenses

169,271

143,852

632,064

597,568

Other selling, general, and administrative expenses

54,828

52,476

213,054

199,580

Total costs and expenses

2,161,284

1,865,608

8,651,445

6,992,378

Income from operations

164,065

142,758

622,860

584,811

Investment and other income

256

592

1,242

2,250

Income before provision for income taxes

164,321

143,350

624,102

587,061

Provision for income taxes

61,160

55,616

237,076

226,231

Net income

$ 103,161

$ 87,734

$ 387,026

$ 360,830

Net income per share (basic)

$ 0.63

$ 0.53

$ 2.35

$ 2.15

Net income per share (diluted)

$ 0.62

$ 0.52

$ 2.33

$ 2.13

Weighted average shares outstanding (basic)

164,729

166,258

164,909

167,695

Weighted average shares outstanding (diluted)

166,075

167,729

165,972

169,194

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

December 31,

2010

December 31,

2009

Assets

Current assets:

Cash and cash equivalents

$ 398,607

$ 337,308

Available-for-sale securities

9,290

48,310

Receivables, net

1,036,070

885,543

Other current assets

37,801

36,108

Total current assets

1,481,768

1,307,269

Property and equipment, net

114,333

117,699

Intangible and other assets

399,598

409,280

Total Assets

$ 1,995,699

$ 1,834,248

Liabilities and stockholders' investment

Current liabilities:

Accounts payable and outstanding checks

$ 627,561

$ 606,514

Accrued compensation

96,991

90,855

Other accrued expenses

47,055

34,438

Total current liabilities

771,607

731,807

Long term liabilities

20,024

22,541

Total liabilities

791,631

754,348

Total stockholders' investment

1,204,068

1,079,900

Total liabilities and stockholders' investment

$ 1,995,699

$ 1,834,248

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands, except operational data)

Twelve months ended

December 31,

2010

2009

Operating activities:

Net income

$ 387,026

$ 360,830

Stock-based compensation

37,047

21,267

Depreciation and amortization

29,369

30,514

Provision for doubtful accounts

13,922

16,685

Other non-cash expenses, net

10,619

267

Net changes in operating elements

(133,204)

(56,992)

Net cash provided by operating activities

344,779

372,571

Investing activities:

Net property additions

(17,718)

(30,362)

Purchases and development of software

(10,959)

(4,104)

Purchases of available-for-sale securities

(10,752)

(52,437)

Sales/maturities of available-for-sale securities

53,111

3,975

Cash paid for acquisition, net

-

(41,145)

Restricted cash

(5,000)

-

Other investing activities

(84)

185

Net cash provided by (used for) investing activities

8,598

(123,888)

Financing activities:

Net repurchases of common stock

(133,324)

(249,165)

Excess tax benefit from stock-based compensation plans

13,092

9,966

Cash dividends

(168,902)

(162,865)

Net cash used for financing activities

(289,134)

(402,064)

Effect of exchange rates on cash

(2,944)

(4,054)

Net change in cash and cash equivalents

61,299

(157,435)

Cash and cash equivalents, beginning of period

337,308

494,743

Cash and cash equivalents, end of period

$ 398,607

$ 337,308

As of December 31,

2010

2009

Operational Data:

Employees

7,628

7,347

Branches

231

235

 

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